Toshiba, IHI sign up to make turbine parts

Two Japanese companies have signed a memorandum of understanding (MoU) on the formation of a joint venture to manufacture steam turbine components for nuclear power plants at home and abroad.

The MoU announced by Toshiba Corp and IHI Corp envisages a new company that will be based at Yokohama, within IHI's Yokohama headquarters representatives office. It will manufacture casings and nozzles for steam turbines at new nuclear power plants for both pressurised water reactors (PWRs) and boiling water reactors (BWRs) for the domestic and overseas markets, as well as providing maintenance services for installed equipment.

According to the companies, the move is a response to expanding global demand for new nuclear power plants and for maintenance services for installed equipment. The collaboration will allow Toshiba to "enhance its steam turbine manufacturing capacity and to strengthen its nuclear power plant business supply chain," while IHI will "extend its business to the manufacture of turbines components, alongside its current manufacture of nuclear reactor pressure vessels and containment vessels."

IHI and Toshiba have a history of working together in building BWRs, for which IHI manufactures pressure vessels. The two companies have interests in PWR construction through Westinghouse, which is majority-owned by Toshiba and in which IHI owns 3%, and are both working to promote their business in the PWR market. In 2008, Toshiba signed agreements with IHI and Doosan of South Korea covering cooperation in PWR business, and since then both Doosan and IHI have been contracted to supply equipment and materials for Westinghouse AP1000 reactor construction projects.

The name and ownership of the joint venture company have yet to be decided, but the launch date is provisionally set for October 2010. It will have a planned capital of ¥300 million ($3.2 million).